Observations of the Estonian Consumer Protection Board about the first five days of euro

People have approached the Consumer Protection Board 244 times concerning the euro during the first five days of this year.
7. 01. 2011
 

People have approached the Consumer Protection Board 244 times concerning the euro during the first five days of this year. People have called the counselling phones 1330 and 6 201 707 187 times and we have received 57 written inquiries. The consumers and entrepreneurs have mainly asked about displaying and rounding prices in euros, change and settling accounts with Euros. At the same time the Consumer Protection Board has received complaints about increasing prices in connection to euro. The Consumer Protection Board has carried out 128 inspections concerning prices in euros during the first five days of year 2011. The Board detected 31 infringements (prices in euros were partly missing, incorrect rounding, etc.).

The Board would like to draw attention to the rounding rules, which have raised a lot of questions.

The price in kroons must be displayed next to the price in euros until 30 June of this year with the exchange rate 15.6466. That is the price shall be rounded with the accuracy of one cent according to the third decimal place. When the number on the third decimal place is 5 or up, the number on the second decimal place will be rounded up.

Example

6.10 / 15.6466 = 0.38986…= 0.39 €

49.90 / 15.6466 = 3.189191…= 3.19 €

264.50 / 15.6466 = 16.90463103….. = 16.90 €

If the price is not rounded according to this, it is an infringement and the Consumer Protection Board should be notified.

The Board would also like to point out that according to the guidelines of displaying the price in two currencies the period of changing the currency of the unit prices is 2 months (01/01/2010–28/02/2010). The Board recommends that other prices would also be displayed in euros and converted to kroons just like unit prices at 01/03/2011 the latest.

The price differences due to double conversion have also caused a lot of confusion amongst other things. It is not an infringement if a product that used to cost 5.50 kroons (0.35 euro) has a new price tag of 0.35 euros (5.48 kroons), but this is inaccuracy due to the so-called mathematical double conversion.  The result cannot be the same if you convert the price in kroons to euros and then convert the price back using the central rate (15.6466).

Example

Bread                                   Bread

5.50 kroons                          0.35 euros

0.35 euros                            5.48 kroons

The same principle applies to all products, service prices and price lists.

In the last few days, we have also received many complaints about different prices increasing due to euro.  It is appropriate to recall at this point that price formation is not restricted in Estonia, except for services that require coordination with the market regulator (water, electricity, gas, etc.). Other prices are determined by demand and supply. This means that the entrepreneur has the right to set prices and, most important of all, the consumer can choose whether he or she buys from that business or not. At this point the Board would like to thank the media for actively reporting any sings of increasing prices, because only that way the consumers will understand which businesses are trying to use the euro to raise prices and which not.

Those, who have subscribed to the Fair Pricing Agreement (FPA), cannot increase prices without a justification. If a business, which has subscribed to the FPA, has raised prices without justifying the raise, this is deemed as unfair commercial practice and is punishable under the Consumer Protection Act.

At this moment most of the complaints are about those businesses that have subscribed to the Fair Pricing Agreement. The Board has started an investigation in these cases.

Andres Sooniste, Director General of the Consumer Protection Board has commented the Fair Pricing Agreement as follows: "This is the entrepreneurs' largest voluntary act of goodwill and it is noteworthy that more than 500 businesses have joined already, a total of more than 2000 places of sale. Businesses that have been inspected so far have not raised prices due to euro. The situation after completing the ongoing investigations will be clear in a while."

 

Additional information:

Hanna Turetski

Head of consumer policy and public relations

53 308076, 6201 706

Consumer Protection Board
Rahukohtu 2
10130 Tallinn ESTONIA
Phone: 6 201 700
Counselling phone: 6 201 707
Fax: 6 201 701
info@tarbijakaitseamet.ee